Evergrande discussing staggered payments, debt-to-equity swaps for US$19 billion offshore bonds, sources say
- Evergrande is looking to repay offshore creditors the principal and interest by turning them into new bonds, which will then be repaid in instalments over seven to 10 years
- Offshore creditors also will be allowed to swap a portion of their debt into stakes in Evergrande Property Services Group and China Evergrande New Energy Vehicle Group
Evergrande, whose entire US$22.7 billion worth of offshore debt including loans and private bonds is deemed to be in default after missing payment obligations late last year, said in March that it will unveil a preliminary debt restructuring proposal by the end of July.
As part of the proposal, Evergrande is looking to repay offshore creditors the principal and interest by turning them into new bonds, which will then be repaid in instalments over a period of seven to 10 years, said one of the sources.
Offshore creditors also will be allowed to swap a portion of their debt into stakes in the developer’s Hong Kong-listed property services unit, Evergrande Property Services Group, and electric vehicle maker China Evergrande New Energy Vehicle Group, said the two sources.
The first source said up to 20 per cent of the offshore debt can be swapped into equities of those two units. The restructuring proposals are, however, at an early stage and are subject to change, the source added.
